SABMiller - ERP Evaluation:

SABMiller has evaluated couple of local accounting packages as well as world-class ERP solutions.  SAP R/3 and Oracle Financials were found to be too big and costly solutions.  There were medium range ERP solutions such as IFS, SAGE, Great Plains and Syspro evaluated by SABMiller India.  They have also evaluated the low-cost local accounting packages such as IBS and Tally (previously used in MBL) and found that they are unable to meet the criteria as discussed in above paragraphs.

Preliminary Planning:

ERP implementation has certain risks, dependencies and challenges and SABMiller India too envisaged these challenges such as implementing ERP solution during rapid business expansion and change in corporate culture. Human behavior, users training, Cost, implementation timeframe, localization, infrastructure and data communication were few other challenges SABMiller took into consideration.   The only relaxation SABMiller had at the time of decision-making was the past experience and confidence in Syspro ERP.  Mr. Derek Kemp, then IT Manager SAB and Mr. David Kvalsavig the M.D. Mysore Breweries  decided to call upon the directors of Syspro and eZeesoft to discuss the possibilities of implementing Syspro.

The key issues were discussed in the preliminary meeting are as follows:

• IT budget and investment plan
• SABMiller’s expansion plan.
• Immediate requirements and priorities
• Phase based implementation plan

Before SABMiller finalized the selection of ERP solution, they had contacted the principal company in South Africa.  Syspro solution was implemented in SAB South Africa on the basis of RDS (Requirement Definition Study).   SABMiller found that the existing ERP structure, setup and coding, chart of accounts and core business functionalities are more or less similar to what is required in SAB India.  70% of the core functionalities found to be the same.  Finally it was decided to go for Syspro ERP solution.

 Modulation:

Initially Finance & Accounting, Sales & Distribution solutions comprises of the following modules have been selected for pilot implementation at MBL.

• Finance & Accounting
• Sales and Distribution
• Accounts Payable                     
• Sales Order
• Report Writer
• Accounts Receivable
• Sales Analysis
• Cash and Bank         
• Purchase Order
• General Ledger
• Inventory Control
• Fixed Assets

It was recommended initially to purchase the license for small number of users and gradually increase the user licenses.  This was a cost effective approach to save money in view of the future business expansion SABMiller planned.

Phase II implementation plan comprises of manufacturing modules:

Implementation Roadmap and Action plan phase-1 (Summary):

• Formation of ‘System Owners’ team & definitions of tasks
• Discussion and presentation on the implementation process
• Commence users training
• Design and test a prototype based on the setup.
• Match COA GL codes of new system with old system.
• Installation, Setup & Testing of System Security in Client/Server environment
• Document above, get management approval and file/record
• Modify necessary coding and Chart of Accounts and electronically update into GL Module.
• Manual update Supplier, Branch, Banks, Customers and other element codes
• Define and link GL Interfaces
• Design & define stationary formats / forms
• Define the parameters for Opening Balances and update the system
• Commence transaction backlog update
• Produce sample built-in reports and circulate
• Map the Financial reports of new system with old system
• Map the opening and closing balances of Old system and new system
• Define ‘Daily Tasks’ daily backup cycle and data security rules
• Plan, document and test the data disaster recovery
• Review and intensify Users security
• Test Month-end and Year-end in Dummy environment
• Go-live &Fine tune system, plan next phase,  continue training at other sites

Transition:

During the prototype, the data transition was given utmost importance.  It was decided to electronically transfer the data wherever possible and for this ODBC tool was utilized.  Syspro’s built-in functionalities utilized to update customer, stock and suppliers history.

User Training:

The major concern was users training.  The training was conducted with the concept of ‘Train the Trainer’.  ‘System Owners’ team was formed who takes up the project ownership during the implementation and system ownership after the project handover.  Individual user appreciation is obtained and documented for record and reference. Small user notes and templates are designed in addition to the online help available in Syspro’s software solution.   A ‘Helpdesk’ system is planned for Phase-2 implementation.  Syspro’s built-in functionalities were utilized to customize the user ‘s screen.  This helps users to get trained better and faster.

Localization:

Localization was the major concerns that were resolved with the help of eZeesoft consultants.   Applying, calculating and updating the excise duties and taxes at the time of Sales Invoicing were resolved using the user-defined fields available in the system.  Necessary interfaces defined and linked with the stock codes to automatically calculate and apply the excise duties.  The GL interfaces in Syspro solutions are available at module / sub ledger level and this makes the accounting implications and posting easy.

Problems and Solutions:

There were several problems identified at the time of prototype.   They were documented resolved and eliminated and are as follows::

• Users resistance to change.  This was resolved by ensuring that the key users own the system implemented and sustained the benchmark of 80% satisfaction in training.  Management also taken necessary measures to announce different rewards and certifications in long term planning.
• Rapid business growth and change in management causes delay in implementation and lack of utilization.  This was handled with the concept of ‘Train the Trainer” in Phase-1 implementation plan and with the concept of ‘NSO’ National System Owners’ in Phase-2 implementation plan.  By this approach the controls and optimum utilization were in place during and after the implementation.
• Job insecurity. ERP for obvious reasons reduces the daily routine works but if they are unnecessary, duplicated or followed without industry standard practices and this causes sense of job insecurity among both good and bad employees. Initially it was encountered and the management has taken necessary measures to eliminate it by ensuring that ERP is meant for increase in productivity and efficiency and not to downsize the manpower structure.  However, it was clarified that those who fail to contribute in achieving the objective may not survive on job.
• Change in system functionalities, workflow and management reporting cause distress.  Migration from small accounting package to a powerful ERP solution causes increase in functionalities and change in management reporting.  The clear objectives of migration from accounting package to ERP were defined and documented at the early stage and awareness was created among every individual that these changes are going to play pivotal roles in increase in productivity, efficiency and ROI (Return on Investment).

 ROI:

SABMiller India at the early stage calculated the return on investment before deciding to opt for ERP.  Within a year time they have started getting the results.  Some of the areas highlighted below that reflect the astuteness of SABMiller’s decision:

• The seamless integration of modules created the clear visibility of every individual transaction and eliminated the duplication which resultant to speedy decision making especially to satisfy customer needs.
• Cost of Sales are determined at the time of transacting Sales Invoice therefore the deal profitability and gross profit in general was instant and visible.  This enabled the management to analyze the business on timely basis.
• Predefined selling pricing system helped operation in managing customers as per the classification.
• Predefined controls on Debtors Accounts Receivable and Creditors Accounts Payable enabled F&A to have necessary ageing reports on timely basis and this in result provided visible cash flow.
• Inventory movements became visible and instant. This supported the operation to control the purchases and deliveries and achieve better inventory turnover.
• Forecast, budget and actual figures are reported on timely basis and necessary analytical reports are directly accessible by top-levels.
• In view of all above, the Syspro ERP system in SABMiller increasing the efficiency, productivity and profitability.
• The Phase-2 plan is under process and SABMiller is planning to gradually enhance the system with manufacturing, B2B, B2C and CRM modules available in Syspro.  This seems how a world-class ERP grows when business grows and how it allow user to follow the phase-based implementation approach.

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